Eaton to divest hydraulics business to Danfoss for $3.3bn
Eaton, a US power management company, has signed an all-cash deal worth $3.3 billion to sell its hydraulics business to Danish industrial company Danfoss.
The divested hydraulics business is said to have accounted for 86% of Eaton’s hydraulics segment revenue last year.
The business is claimed to be among the top players in the world for hydraulics components, systems, and services for industrial and mobile equipment. Its products are used in construction, agriculture, and in industrial market sectors.
In 2019, the business had made $2.2 billion in sales and has nearly 11,000 people.
Eaton will retain its filtration and golf grip businesses, which is reported currently in its hydraulics segment.
Craig Arnold – Eaton chairman and CEO said: “Today’s announcement is part of the ongoing transformation of Eaton into a higher growth company with better earnings consistency.
“We believe this transaction will create substantial value for our shareholders and allow our hydraulics employees to be part of a company that has a strong commitment to the hydraulics industry.”
For Danfoss, the deal is said to fully align with its strategy to consolidate its main businesses and improve customer value. The acquisition also helps Danfoss to foray into the industrial hydraulics market.
Kim Fausing – Danfoss president and CEO said: “Eaton Hydraulics is a highly respected player in the global hydraulics industry, recognized for its dedicated people and strong brands.
“By combining the knowledge and experience of these two companies, our customers will benefit from unmatched expertise from a single partner.”
Subject to meeting of customary closing conditions and receipt of regulatory approvals, the deal is likely to be completed by the year end.